Project Administration Manual

Transcription

1 Road Rehabilitation Project Additional Financing (RRP KIR ) Project Administration Manual Project Number: Grant Number: November 2016 Republic of Kiribati: Road Rehabilitation Project

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3 Contents ABBREVIATIONS I. PROJECT DESCRIPTION 1 II. IMPLEMENTATION PLANS 2 A. Project Readiness Activities 2 B. Overall Project Implementation Plan 2 III. PROJECT MANAGEMENT ARRANGEMENTS 3 A. Project Implementation Organizations Roles and Responsibilities 3 B. Key Persons Involved in Implementation 4 C. Project Organization Structure 5 IV. COSTS AND FINANCING 6 A. Detailed Cost Estimates by Expenditure Category 6 B. Allocation and Withdrawal of Loan Proceeds (US$) 7 C. Detailed Cost Estimates by Financier (US$) 8 D. Contract and Disbursement S-curve 9 E. Fund Flow Diagram 11 V. FINANCIAL MANAGEMENT 12 A. Financial Management Assessment 12 B. Disbursement 12 C. Accounting 13 D. Auditing 13 VI. PROCUREMENT AND CONSULTING SERVICES 15 A. Advance Contracting and Retroactive Financing 15 B. Procurement of Goods, Works and Consulting Services 15 C. Procurement Plan 16 D. Consultant's Terms of Reference 19 VII. SAFEGUARDS 29 VIII. GENDER AND SOCIAL DIMENSIONS 29 IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION 30 A. Project Design and Monitoring Framework 30 B. Monitoring 33 C. Evaluation 34 D. Reporting 34 E. Stakeholder Communication Strategy 35 X. ANTICORRUPTION POLICY 36 XI. ACCOUNTABILITY MECHANISM 37 XII. RECORD OF PAM CHANGES 38

4 Project Administration Manual Purpose and Process The project administration manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with Government and Asian Development Bank (ADB) policies and procedures. The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM. The Ministry of Finance and Economic Development will be the executing agency and Ministry of Public Works and Utilities will be the implementing agency are wholly responsible for the implementation of ADB financed projects, as agreed jointly between the borrower and ADB, and in accordance with Government and ADB s policies and procedures. ADB staff is responsible to support implementation including compliance by Ministry of Finance and Economic Development and Ministry of Public Works and Utilities of their obligations and responsibilities for project implementation in accordance with ADB s policies and procedures. At Loan/Grant Negotiations the borrower and ADB shall agree to the PAM and ensure consistency with the Loan/Grant agreement. Such agreement shall be reflected in the minutes of the Loan/Grant Negotiations. In the event of any discrepancy or contradiction between the PAM and the Loan/Grant Agreement, the provisions of the Loan/Grant Agreement shall prevail. After ADB Board approval of the project's report and recommendation of the President (RRP) changes in implementation arrangements are subject to agreement and approval pursuant to relevant Government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval they will be subsequently incorporated in the PAM.

5 Abbreviations ADB = Asian Development Bank ADF = Asian Development Fund AFS = audited financial statements CQS = consultant qualification selection DMF = design and monitoring framework EA = executing agency EIA = environmental impact assessment EMP = environmental management plan GACAP = governance and anticorruption action plan IA = implementing agency IBRD = International Bank for Reconstruction Development ICB = international competitive bidding IDA = International Development Association IEE = initial environmental examination km = kilometer MELAD = Ministry of Environment, Land and Agriculture Development MFED = Ministry of Finance and Economic Development MPWU = Ministry of Public Works and Utilities NCB = national competitive bidding NGO = nongovernment organization PAI = project administration instructions PAM = project administration manual PIU = project implementation unit PRIF = Pacific Regional Infrastructure Facility QCBS = quality- and cost-based selection RRP = report and recommendation of the President to the Board SPS = Safeguard Policy Statement TOR = terms of reference WB = World Bank

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7 I. PROJECT DESCRIPTION A. The project's rationale, location and beneficiaries 1. The Project will rehabilitate approximately 37.5 kilometers (km) of main road and about 8.5 km of priority feeder and access roads on South Tarawa. The Project will include the country s principal road from the airport through the administrative capital of Bairiki to the sea port of Betio, passing through continuously densely populated areas. The existing road is in very poor condition, impacting upon transport efficiency and quality of life. The World Bank (WB), the Government of Australia (through the Pacific Regional Infrastructure Facility (PRIF) and the Australia-Pacific Islands Partnership (APIP) Trust Fund), Government of Kiribati will jointly finance the Project with ADB. Reconstruction of the road will bring relief to individual road users, pedestrians and to persons living alongside the road. Vehicle operating costs will be reduced, providing an impetus for economic development and poverty alleviation. B. Impact and Outcome 2. The impact will be an improvement in the socioeconomic condition of the population of South Tarawa. The outcome will be sustainable access to a safe, well maintained road network for the whole of the population of South Tarawa. 3. The Project outputs will be: Output 1. The South Tarawa road network will be rehabilitated and upgraded. The civil works will be procured under a single civil works contract and will comprise the following investment components: (i) Rehabilitation of Paved Roads. The road from St. Anne to the airport (about 21.5 km), including the Temaiku spur (about 6.1 km), and the road from Tanaea to the north of Buota island (about 2.5 km) will be rehabilitated. Rehabilitation and upgrading will include reconstruction and strengthening of the pavement, drainage improvements and provision of safety features including speed humps and footpaths. (ii) Repairs to Paved Roads in Betio and Bikenibeu. In 2008, the Japanese Government financed the reconstruction of the paved road network in Betio. However, there have been localized pavement failures mainly due to inadequate drainage. These will be repaired under the project with additional drainage constructed. The additional scope, comprises an extra 5.5 km paved road to cover the Betio loop main road. (iii) Sealing of Feeder Roads. About 8.5 km of priority unsealed urban feeder roads with high traffic volumes will be upgraded and sealed. The additional scope, 0.49 km of Bairiki feeder roads, is included. (iv) Rehabilitation of Betio Causeway. The pavement on the causeway will be rehabilitated (about 0.4 km). The bridge deck was deleted following the deletion of 2.8 km of the pavement works. 4. Output 2. Community-based road maintenance groups with the capacity to maintain the network will be established. The civil works contractor will employ and train persons selected by the implementing agency (in consultation with the contractor, community groups, town councils and relevant stakeholders). TA will be provided to prepare a training program. The contractor will provide hands-on training in maintenance practices, and the contract supervising engineer will monitor the training program. The civil works contract will include a two-year defects liability period during which routine maintenance will be the responsibility of the civil works contractor. Maintenance work will be undertaken by the community-based maintenance groups, still employed by the main contractor, but under a performance-based contract arrangement. On expiry of the defects notification period, the Ministry of Public

8 2 Works and Utilities (MPWU) will assume responsibility for maintenance but will tender the community-based maintenance groups using performance-based contracts. Major periodic maintenance will remain the responsibility of MPWU. 5. Output 3. The MPWU provides efficient implementation support. The MPWU will be resourced with Project Support Team and fiduciary and procurement services provided through the Ministry of Finance and Economic Development s Kiribati Fiduciary Services Unit. II. IMPLEMENTATION PLANS A. Project Readiness Activities ADB = Asian Development Bank, EA = executing agency (Ministry of Finance and Economic Development), WB = World Bank. B. Overall Project Implementation Plan Listed are the implementation activities (on a quarterly basis) to be updated annually and submitted to ADB with contract and disbursement projections for the following year.

9 3 III. PROJECT MANAGEMENT ARRANGEMENTS A. Project Implementation Organizations Roles and Responsibilities Project implementation organizations Executing agency - MFED Management Roles and Responsibilities Responsible for the overall execution of the project. Coordinate with the IA on the preparation of withdrawal applications and submission to ADB. Responsible for maintaining separate accounts for the Project, having all project accounts audited annually and submitted to ADB. Project Steering Committee Oversee and monitor all aspects of project implementation. Advise the Government of any issues or concerns affecting project implementation and propose remedial action. Implementing agency - MPWU Responsible for the day to day implementation of the project. Responsible for negotiation of design contract. Work closely with the Consulting Firm Roughton International and Fraser Thomas in the preparation of design and construction supervision of road Rehabilitation contract. Checks and certifies work done by the Contractor McConnell Dowell and submits interim certificate with invoice to the EA. ADB Responsible for administering ADB-funded components of the Project Responsible for administration of Consulting Firm for design and construction supervision in coordination with the IA. World Bank Primarily responsible for administering World Bank and Government of Australia (through PRIF and APIP) financed components of the project.

10 4 B. Key Persons Involved in Implementation Executing Agency Ministry of Finance and Economic Development Implementing Agency Ministry of Public Works and Utilities ADB SPSO Mission Leader Officer's Name: Mr. Eriati Manaima Position: Secretary for Finance Telephone: (686) address: Office Address: Bairiki, Tarawa, Republic of Kiribati Officer s Name: Mr. Benjamin Tokataake Position: Secretary for Public Works and Utilities Telephone: (686) address: secret@mpwu.gov.ki Staff Name: Robert Jauncey Position: Regional Director Telephone No.: (679) address: rjauncey@adb.org Office Address: Level 4 & 5, Ra Marama Building, 91 Gordon Street, Suva, Fiji Islands Staff Name: Jude Kohlhase Position: Infrastructure Specialist Telephone No.: (679) address: jkohlhase@adb.org Office Address: Level 4 & 5, Ra Marama Building, 91 Gordon Street, Suva, Fiji Islands

11 5 C. Project Organization Structure ADB=Asian Development Bank, EA=executing agency, IA=implementing agency, MFED=Ministry of Finance and Economic Development, MPWU=Ministry of Public Works and Utilities, PRIF=Pacific Regional Infrastructure Facility.

12 6 IV. COSTS AND FINANCING 1. Three cost categories will be financed by ADB. These are (i) civil works; (ii) consultants services; and (iii) interest during construction (IDC) on the ADB loan of $12.0 million, grant of $2.4 million and an additional financing grant of $9.0 million. ADB will finance 100% of the cost of design and supervision of consulting services. The ADB, Government of Australia and WB will jointly finance the cost of civil works (exclusive of taxes and duties) in the proportions set forth in the detailed cost estimates. ADB will finance 100% of IDC accruing to the ADB loan. The World Bank financing of $26.97 million will be provided as a grant. The Government of Australia has provided $18.86 million on a grant basis for civil works through PRIF and APIP, under administration by the World Bank. Government will finance its contribution from its own resources, including using income generated from the Betio causeway toll. A. Detailed Cost Estimates by Expenditure Category Item Local Currency (A$) million Foreign Currency (US$) million % of Total Cost A. Investment Costs 1. Civil Works % 2. Consultants a. Design and Construction Supervision % b. Project Management % c. Land acquisition and resettlement % d. Technical assistance % 3. Goods % Subtotal (A) B. Contingencies % C. Financing Charges During Implementation % Total Project Cost (A+B+C) % Source: ADB and World Bank estimates.

13 7 B. Allocation and Withdrawal of Loan Proceeds (SDR) ALLOCATION AND WITHDRAWAL OF LOAN PROCEEDS Kiribati Road Rehabilitation Project CATEGORY ADB FINANCING BASIS Total Amount Percentage of ADB Financing Number Item Allocated for from the Loan Account ADB Financing SDR 1 Works 3,361, % of total expenditure 1A Works 650, % of total expenditure 2 Consulting Services 3,520, % of total expenditure* 3 Interest Charge 89, % of amounts due Total 7,621, * Exclusive of taxes and duties imposed within the territory of the borrower. Allocation and Withdrawal of Grant Proceeds ALLOCATION AND WITHDRAWAL OF GRANT PROCEEDS Kiribati Road Rehabilitation Project CATEGORY ADB FINANCING BASIS Total Amount Percentage of ADB Financing Number Item Allocated for from the Grant Account ADB Financing USD 1 Works 2,400, % of total expenditure Total 2,400, * Exclusive of taxes and duties imposed within the territory of the beneficiary. Allocation and Withdrawal of Grant Proceeds ALLOCATION AND WITHDRAWAL OF GRANT PROCEEDS Kiribati Road Rehabilitation Project CATEGORY ADB FINANCING BASIS Total Amount Percentage of ADB Financing Number Item Allocated for from the Grnat Account ADB Financing USD 1 Works 9,000, % of total expenditure* Total 9,000, * Exclusive of taxes and duties imposed within the territory of the beneficiary.

14 8 C. Detailed Cost Estimates by Financier (US$) A. Investment Costs a,b Category World Bank ADB $ million % Original Financing $ million % First Additional Financing $ million % Second Additional Financing $ million % GOA Through PRIF $ million % $ million GOK % Total 1. Infrastructure Improvements % % % % A Infrastructure Improvements % % % 2.57 a. Coastal protection % 0.97 b. Construction works % % 2.64 b. Construction works % % Consultants a. Design and Supervision i. ADB consultants % 5.87 ii. WB consultants % 0.14 b. Technical Assistance % 0.51 c. Project Support % % Goods % Land Acquisition and % 0.13 Resettlement Subtotal (A) B. Contingencies c % 2.21 C. Financing Charges During Implementation d % 0.13 D. Unallocated 0 0 a b c d Total Project Costs (A+B+C) % % % % % % Includes taxes and duties of 10% to be financed by ADB, GOA (PRIF & APIP), WB and Government resources. In mid-2016 prices. Physical and Price contingencies computed at 15% for civil works; and 10% for consultants services. Includes interest and commitment charges. Service Charge for World Bank IDA credits is 0.75% of disbursed and outstanding credit balance. Service Charge for World Bank IDA credits is 0.75% of disbursed and outstanding credit balance. Interest during construction for ADB loan from the Asian Development Fund has been computed at an interest rate of 1%. Source: World Bank and ADB estimates

15 9 D. Contract and Disbursement S-curve Date L2718 G0470 Cumulative Cumulative Cumulative Cumulative Contract Contract Disbursement Disbursement Awards Awards ($m) ($m) ($m) ($m) Dec Additional Financing Cumulative Contract Awards ($m) Cumulative Disbursement ($m) Mar Jun Sep Dec Jan Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Jan-17 Feb

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17 11 E. Fund Flow Diagram ADB = Asian Development Bank, GOA = Government of Australia; GoK = Government of Kiribati, MPWU = Ministry of Public Works and Utilities, WB = World Bank.

18 12 V. FINANCIAL MANAGEMENT A. Financial Management Assessment 1. The 2010 Public Expenditure and Financial Accountability (PEFA) assessment indicated that public financial management in Kiribati is weakened by a lack of fiscal discipline, nonretirement of advances, lack of financial reconciliation between Ministry of Finance and Economic Development (MFED) and line ministries, lack of effective expenditure commitment controls, and outdated legislation and regulations 1. Since then, ADB, the European Union, the Pacific Financial and Technical Advisory Center, the governments of Australia and New Zealand, and the World Bank have assisted the government in designing and implementing the Kiribati Public Financial Management Plan by (i) putting in place a medium-term budget framework to underpin strategic planning and budgeting; (ii) building capacity in the Customs and Tax Departments for VAT implementation; (iii) approving a debt management policy which restricts the government and state-owned enterprises from taking on any loans without MFED advice and Cabinet approval; and (iv) developing capacity of the National Economic and Planning Office to improve planning and budgeting linkages and the Accounting Department on the use of accounting software and preparation of financial reports. Plans are in place to update the PEFA assessment in The financial management arrangements as proposed for the original project will continue for the additional financing project. The World Bank, in their appraisal for proposed additional financing for the project, rated the financial management performance as satisfactory and ADB is content to rely on the information provided by the World Bank. There are no overdue audited project financial statements or pending financial management issues. MFED, the executing agency for the project, is also the executing agency for ADB s 2 ongoing projects. 2 The project accountants for ADB s 2 ongoing projects are based in the Kiribati Fiduciary Services Unit (KFSU), which was established within the MFED to provide fiduciary support for all World Bank financed projects. The KFSU continues to be supported by World Bank s international financial management advisor and with the advisor s support, adopted a financial management manual which was developed to reflect its supporting role. The project accountants have received training and regular support from the advisor and are also well-versed with ADB s disbursements and financial reporting and auditing requirements. One of the project accountants attended an ADB training on financial reporting and auditing requirements in B. Disbursement 3. The Grant proceeds will be disbursed in accordance with ADB s Loan Disbursement Handbook (2015, as amended from time to time), and detailed arrangements agreed upon between the Government and ADB. Online training for project staff on disbursement policies and procedures is available at: Project staff are encouraged to avail of this training to help ensure efficient disbursement and fiduciary control. 4. Disbursement arrangements as proposed for the original project will continue for this additional financing project. The project will not establish an imprest account and statement of expenditure procedures will not be used. MFED will submit withdrawal applications to ADB, against validated invoices from the contractor and consulting firm and ADB will directly pay them. 5. Direct payment or reimbursement procedure will generally be used for works, which will be Government of Kiribati. Kiribati Public Financial Management Performance Report. Available at: 2 L2718-KIR: Road Rehabilitation Project and L2795/G0263/G0387-KIR South Tarawa Sanitation Improvement Sector Project.

19 13 in accordance with the terms of the contract. There will be a single civil works contract and each month, the contractor will submit an invoice, accompanied by an engineering report of the works completed. The supervision consultant will review the contractor s invoice against the contract and will submit a recommendation for payment to the Ministry of Public Works and Utilities (MPWU). Once verified, MPWU will submit the approved invoice to the Ministry of Finance and Economic Development (MFED), who will prepare a withdrawal application for signature by the authorised signatories. ADB will make direct payment to the contractor in the proportion shown in the allocation tables attached to the financing agreements. 6. Direct payment procedure will also generally be used for consulting services, which will be in accordance with the terms of the contract. There will be one consultant design and supervision contract and the supervision consultant will submit their invoices to the MPWU for verification. Once verified, MPWU will submit the approved invoice to the MFED, who will prepare a withdrawal for signature by the authorized signatories. 7. The MPWU will be responsible for (i) preparing disbursement projections, (ii) requesting budgetary allocations for counterpart funds, and (iii) collecting supporting documents. The MFED will be responsible for (i) preparing the withdrawal applications for signature by the authorized signatories, and (ii) submitting the withdrawal applications on ADB s Client Portal for Disbursements System or forwarding hard copies to ADB for payment. 8. Before the submission of the first withdrawal application, MFED will submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the borrower, together with the authenticated specimen signatures of each authorized person. The minimum value per withdrawal application is US$100,000, equivalent. Individual payments below this amount should be paid by the EA/IA and subsequently claimed to ADB through reimbursement, unless otherwise accepted by ADB. 9. All disbursements under government financing will be carried out in accordance with regulations of the government and prevailing ADB guidelines. C. Accounting 12. The MFED will maintain separate project accounts and records by funding source for all expenditures incurred on the Project. Project accounts will follow international accounting principles and practices or the national equivalent, acceptable to ADB. 3 D. Auditing 13. The MFED will (i) prepare the annual financial statements for the project, in accordance with accounting principles acceptable to ADB; (ii) have such financial statements audited annually by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB, in accordance with international standards for auditing or the national equivalent acceptable to ADB; and (iii) furnish to ADB, not later than 6 months after the end of each related fiscal year, copies of the audited financial statements, audit report and management letter, all in the English language, and other information concerning these documents and the audit thereof as ADB shall from time to time, reasonably request. 14. The annual audit report will include an audit management letter and audit opinions which cover (i) whether the project financial statements present a true and fair view or are presented 3 All public financial statements are prepared in accordance with the legislation (1976 Public Finance (Control and Audit) Act).

20 14 fairly, in all material aspects, in accordance with the applicable financial reporting framework; (ii) whether grant proceeds were used only for the purpose of the project or not; and (iii) the level of compliance for each financial covenant contained in the legal agreements for the project. 15. Compliance with financial reporting and auditing requirements will be monitored by review missions and during normal program supervision, and followed up regularly with all concerned, including the external auditor. 16. The Government and MFED were made aware of ADB s approach to delayed submission, and the requirements for satisfactory and acceptable quality of the audited project financial statements. 4 ADB reserves the right to require a change in the auditor (in a manner consistent with the constitution of the recipient) or for additional support to be provided to the auditor, if the audits required are not conducted in a manner satisfactory to ADB, or if the audits are substantially delayed. ADB reserves the right to verify the project s financial accounts to confirm that the share of ADB s financing, is used in accordance with ADB s policies and procedures. 17. Public disclosure of the project financial statements, including the audit report on the project financial statements, will be guided by ADB s Public Communications Policy (2011). 5 After review, ADB will disclose the annual audited financial statements for the project and the opinion of the auditors on the financial statements within 30 days of the date of their receipt, by posting them on ADB s website. The audit management letter will not be disclosed. 4 ADB Policy on delayed submission of audited project financial statements: When audited project financial statements are not received by the due date, ADB will write to the executing agency advising that (i) the audit documents are overdue; and (ii) if they are not received within the next six months, requests for new contract awards and disbursement such as new replenishment of imprest accounts, processing of new reimbursement, and issuance of new commitment letters will not be processed. When audited project financial statements have not been received within 6 months after the due date, ADB will withhold processing of requests for new contract awards and disbursement, such as new replenishment of imprest accounts, processing of new reimbursement, and issuance of new commitment letters. ADB will (i) inform the executing agency of ADB s actions; and (ii) advise that the grant may be suspended if the audit documents are not received within the next six months. When the audited project financial statements have not been received within 12 months after the due date, ADB may suspend the grant. 5 Available at:

21 15 VI. PROCUREMENT AND CONSULTING SERVICES A. Advance Contracting and Retroactive Financing 1. All advance contracting and retroactive financing will be undertaken in conformity with ADB s Procurement Guidelines (current version 2015, as amended from time to time) (ADB s Procurement Guidelines) 6 and ADB s Guidelines on the Use of Consultants (current version 2013, as amended from time to time). 7 The issuance of invitations to bid under advance contracting and retroactive financing will be subject to ADB approval. The borrower, Ministry of Finance and Economic Development (EA) and Ministry of Public Works and Utilities (IA) have been advised that approval of advance contracting and retroactive financing does not commit ADB to finance the project. 2. Advance contracting. Advance contracting was undertaken to select the Design and Supervision consultants. The government requested that ADB undertake the recruitment in its place. The government entered into a contract with the firm selected by ADB. The prior approval of ADB for the negotiated contract was required. 3. Retroactive financing. The contract for Design and Supervision services was eligible for retroactive financing up to $600,000 (the equivalent of 5% of the total ADB loan), incurred before loan effectiveness, but not more than 12 months before the signing of the loan agreement. B. Procurement of Goods, Works and Consulting Services 4. All procurement of goods and works will be undertaken in accordance with ADB s Procurement Guidelines (2015, as amended from time to time) with such modifications and waivers as ADB will have agreed to for this project. 5. In view of the limited number of global suppliers likely to be interested in a geographically isolated project of this size, it is not feasible or desirable to split the works into separate physical components or contracts with different suppliers. It is therefore more efficient and economical to procure the civil works under a single contract that will be cofinanced jointly with the World Bank, PRIF and the government. To enable joint cofinancing of this procurement package, ADB Board of Directors has waived member country procurement eligibility restrictions to permit participation of bidders from non-adb member countries and/or procurement of goods and services from non-adb member countries. 6. An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages and national competitive bidding guidelines is in Section C. 7. All consultants financed by ADB have been recruited according to ADB s Guidelines on the Use of Consultants. 8 The terms of reference for all consulting services are detailed in Section D. 8. An estimated 86 person-months (81 international, 5 national) of consulting services are required to (i) facilitate project management and implementation, and (ii) strengthen the institutional and operational capacity of the executing agency. Consulting firms will be 6 Available at: 7 Available at: 8 Checklists for actions required to contract consultants by method available in e-handbook on Project

22 16 engaged using the quality- and cost-based selection (QCBS) method with a standard quality: cost ratio of 80:20. C. Procurement Plan 9. The procurement plan is prepared in accordance with OSFMD generic or country specific templates as appropriate. 9 Basic Data Project Name: Road Rehabilitation Project Country: Kiribati Executing Agency: Ministry of Finance and Economic and Economic Development Implementing Agency: Ministry of Works and Public Utilities Loan Amount: $12,000,000 Loan Number: 2718 Grant Amount: $2,400,000 Grant Number: XXXX World Bank Grant Financing: $26,970,000 Grant Number: H645 PRIF Grant Financing: $12,790,000 Grant Number: TF Counterpart Funds: $5,690,000 Date of First Procurement Plan: 12 November 2010 Date of this Procurement Plan: 14 October Process Thresholds, Review and 18-Month Procurement Plan 10. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works. Method Procurement of Goods and Works Threshold International Competitive Bidding (ICB) for Works $1,000, ADB Prior or Post Review 11. Except as ADB may otherwise agree, the following prior or post review requirements apply to the various procurement and consultant recruitment methods used for the project. 9 Available at: 5 AA D9002FCB8F/?OpenDocument.

23 17 Procurement Method Prior or Post Comments Procurement of Goods and Works ICB Works Prior Recruitment of Consulting Firms Quality- and Cost-Based Selection (QCBS) Prior ADB will select a consulting firm, on behalf of the EA, for design and supervision services under advance procurement. The EA is responsible for negotiating a contract. The recruitment shall comply with ADB Guidelines on the Use of Consultants (2013, as amended from time to time) Recruitment of Individual Consultants Procurement Method Prior or Post Comments Individual Consultants Prior ICB = international competitive bidding, QCBS = quality- and cost-based selection. 3. Goods and Works Contracts Estimated to Cost More Than $1 Million 12. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description Road Rehabilitation Civil Works Contract Value $ 50.1 million ICB = international competitive bidding, N = no. Procurement Prequalification Advertisement Method of Bidders (y/n) Date (quarter/year) Comments ICB N 2/11 The original procurement plan indicated an estimated value of $34.44 million. The awarded contract value was $50.1 million (signed 12 February 2013). The contract duration is expected to be complete after the defects period, by March Consulting Services Contracts Estimated to Cost More Than $100, The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

24 18 General Description Design and construction supervision Advertisement International or Contract Recruitment Date National Value Method 1 (quarter/year) Assignment Comments $2.15 million QCBS (80:20) 3/10 International The original procurement plan indicated an estimated value of $2.2 million. The awarded contract value was $2.15 million (signed on 1 December 2010). Annual audit $0.03 CQS 3/11 International or National Audit being performed by Kiribati Audit Office. Consultancy is no longer required. 5. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100, The following table groups smaller-value goods, works and consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description None Value of Contracts (cumulative) Number of Contracts Procurement / Recruitment Method Comments 6. Indicative List of Packages Required Under the Project 15. The following table provides an indicative list of all procurement (goods, works and consulting services) over the life of the project. Contracts financed by the Borrower and others should also be indicated, with an appropriate notation in the comments section.

25 19 General Description Road rehabilitation civil work Total contract cost escalation for civil works contract. Estimated Value (cumulative) Estimated Number of Contracts Domestic Preference Applicable Procurement Method Comments $50.1 million 1 ICB No The awarded contract value was $50.1 million and signed on 12 February The contract is jointly financed by the cofinanciers. $5.3 million (A$7.7 million) Contract variations Ongoing. Consulting Services for design and construction supervision $4.43 million 1 QCBS Simplified Technical proposal The awarded contract value was $2.15 million. EA = Executing Agency, CQS = consultant qualification selection, ICB = international competitive bidding, QCBS = quality- and cost-based selection. 7. National Competitive Bidding 16. There is no Procurement following national Competitive Bidding rules in the Procurement Plan. D. Consultant's Terms of Reference Introduction: Preparation of Design and Construction Supervision of Road Rehabilitation Works 17. Kiribati is a small, remote country comprised of a number of dispersed islands. The capital, and 43% of the population, some 45,000 people are located in South Tarawa. The communities are linked to each other, and the international airport, by a single main sealed road and three causeways running east to west. While parts of the road in Betio, Bairiki and Bikenibeu were rehabilitated in 2008, some 27.5 km of paved roads have received no major maintenance for twenty years or more. Prolonged periods of heavy rain have persisted since March 2009, and coupled with the high traffic levels (over 6,000 veh/day in some locations), the main road has suffered extensive damage. The magnitude of the damage has completely overwhelmed the Government's capacity for repair or emergency maintenance, to the extent that substantial sections have completely lost the seal and reverted to unpaved status. Many sections are therefore in need of reconstruction, with the balance in need of urgent rehabilitation to prevent further deterioration. 18. The Government of Kiribati (GoK) intends to seek loans from the Asian Development Bank (ADB) and the World Bank (WB) which will be applied to financing the cost of rehabilitating the sealed road network and upgrading a number of access and feeder roads (the Project). Consultants services will be required to undertake (i) detailed engineering design and bid documentation, (ii) tender phase management, and (iii) construction supervision and contract management. Approximately international person-months of international specialist and

26 20 technical services will be required during the design phase. Approximately 56 person-months of international and 4.5 person-months of domestic specialist inputs will be required during the construction and post-construction phases. GoK will select a firm of consultants following qualityand cost-based selection process in accordance with ADB's Guidelines on the Use of Consultants (2010, as amended from time to time). The consultants services will be financed by ADB and the civil works will be financed by ADB, WB and GoK jointly. The Ministry of Finance and Economic Development will be the Executing Agency (EA) and the Ministry of Public Works and Utilities (MPWU) will be the implementing agency (IA). During the services, the Consultant will embed selected personnel from the MPWU to receive training, experience and capacity building in the design and management of road construction projects. Design Phase Services 19. The works to be designed comprise (i) the rehabilitation of the road from the airport to Bairiki (approximately 21.5 km), (ii) rehabilitation of the road pavement of the Betio causeway (approximately 3.2 km), (iii) upgrading of priority feeder and access roads (approximately 6 km), (iv) rehabilitation and upgrading of roads in Teimaku (approximately 2.8 km) and (v) repair of isolated sections of road upgraded in The Project roads will not require significant realignment and will be designed to be within the existing road corridor. Design Phase Tasks 20. The design phase services shall include, but not necessarily be limited to the following: (i) Field Surveys. Field surveys will be conducted to gather the necessary data to undertake the detailed design. This shall include, but not be limited to, traffic studies, site investigations and instrumented tests (topographic, hydro- geological, hydrological, hydraulic, geo-technical, soils and pavement strength). Particular attention shall be paid to road safety and provision of facilities for disabled (i.e., universal access). The consultant should note that drainage is a critical issue and extreme care will be needed during the surveys to ensure that there is proper provision of drainage in the designs. Topographical surveys shall include all features, buildings, access ways, existing services, trees with trunk diameters greater than 300millimeters within 20 meters either side of the existing road line. Topographical survey will be augmented beyond 20 meters where required for any part of the design, including definition of drainage easements. (ii) Establishment of Basic Materials Testing Laboratory. The consultant shall equip and set up a basic materials testing facility at the MPWU, suitable for undertaking routine quality control during construction. A provisional sum is provided for purchase of equipment recommended by the consultant and agreed by the IA. The equipment will become the property of the IA. (iii) Detailed Engineering Design. Detailed designs shall take into account the findings from the field surveys. The consultant shall pay particular attention to the road safety aspects of the design and consult with affected communities. An independent road safety audit shall be conducted of the consultants' draft design prior to acceptance by the client and the consultant shall incorporate the recommendations into the final designs. Consideration will be given in the designs to (i) the implications and costs of providing additional culverts in the existing causeways to improve the flow in and out of the lagoon, (ii) accommodation of future services including fibre optic cable ducting, and water and sanitation services, (iii) means of improving subsurface water reserves by introducing road water run off, and (iv) alternative pavement types to minimize maintenance. (iv) Climate Change Adaptation. Designs will take into consideration forecasts of future changed climatic conditions, including but not limited to changes in rainfall

27 intensity and sea level rise. Appropriate measures will be incorporated in the detailed designs and the additional cost of such measures will be identified. (v) Coastal Erosion. The consultant will liaise closely with the Kiribati Adaptation Project II which is carrying out coastal protection work along sections of the project road. (vi) Sustainable Transport. The consultant will assess the potential for other forms of transport, including whether bicycles could be widely used and recommend accommodation measures in the design of the works accordingly. (vii) Updating of Environmental Management Plan (EMP). A preliminary EMP has been prepared and publicly disclosed to affected persons. On the basis of the detailed design, the EMP will be updated and made specific, fully reflecting the construction activities. The consultant will arrange for the EMP to be provided in hard copy at publicly accessible locations and to conduct consultations. These consultations shall also include presenting the overall design to ensure acceptability to the local population. Information on the availability of EMPs and on the venue and time of consultation meetings should be announced through the local newspapers and/or through any other media. Minutes of consultation meetings shall be properly documented and provided in progress reports. (viii) Preparation of a Resettlement Plan: The consultant will, during the design phase, identify all land needed for construction of the works. While it is expected that the majority of the works will be constructed within the footprint of the existing road (generally 10 meters width centered on the existing center line), other works may be required, including bus bays and drainage easements and the like that fall outside of the footprint. The consultant will assist the Government to update the resettlement plan meeting ADB and WB's requirements as set out in their safeguard policies, covering all such resettlement actions. To the extent possible, the design will avoid significant resettlement actions by ensuring local stakeholders are fully consulted on the location of any works outside of the footprint. (ix) Betio Bridge. The consultant will undertake a condition survey of the Betio bridge and make recommendations for repairs if required. The design of the repairs is not included in these TOR and will be added through a variation if required. (x) Road Maintenance Micro-enterprise Groups. It is intended that approximately five micro-enterprise road maintenance groups be trained by the contractor during project implementation and will be employed by it for routine maintenance of the completed works during the defects notification period. The consultant will design and specify training programs to be provided by the contractor for inclusion in the construction contract, including specification of small equipment to be provided by the contractor to each group. (xi) Preparation of Bidding Documents. The consultant shall prepare bidding documents for international competitive bidding in conformity with the standard bidding documents of the WB for contracts without prequalification and using the Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer, Multilateral Development Bank Harmonized Edition, March Draft bidding documents shall be provided to ADB and WB for obtaining their "no objection" prior to issuing the invitation for bids. (xii) Tender Phase Management. The consultant shall assist the MPWU in all aspects of bid document preparation, advertising of bids, tender phase management including organization and documentation of a pre-bid meeting, and evaluation of bids received. The consultant will assist the MPWU to prepare a bid evaluation report, in accordance with the WB's guidelines on bid evaluation, and, after receipt of the "no objection" from ADB and WB to the proposed contract award, assist 21

28 22 Design Phase Schedule the MPWU with any contract negotiations. 21. It is expected that the design phase services will commence during January 2010 and that draft bid documentation will be completed within 4 months of commencement. To the extent that the consultant believes that detailed design for the whole of the project cannot be completed within that period, the consultant may propose completing a lesser amount of the design, with the balance defined in the bidding documents on the basis of the scope and estimated work quantities. It would nevertheless be expected that all detailed engineering would be completed no later than the time of negotiations for award of the civil works contract. The consultant shall state the amount of detailed design that it expects to complete within 4 months of commencement in its technical proposal. 22. A period of 21 days shall be allowed in the consultants work program for ADB and WB review of the draft bidding documents. It is expected that the safety audit would be conducted concurrently. A period of 60 days shall be allowed for receipt of bids, from the time bid invitations are issued. A period of 21 days shall be allowed for ADB and WB review of the bid evaluation report. Construction Phase Services Supervision Phase Tasks 23. Services to be provided during the construction phase include but are not necessarily limited to the following: (i) Liaising between the IA and contractor and preparing and submitting monthly progress reports for submission to the financing agencies. The format and content of these reports shall be agreed on with the agencies; (ii) Supervising the works, approving materials, equipment and workmanship to ensure that the contract is executed in accordance with the requirements of the contract; (iii) Monitoring and checking the day-to-day quality control and quantity measurements of the works carried out under the contract; (iv) Checking all quantity measurements and calculations required for payment purposes and ensure that all measurements and calculations are carried out in a manner and at the frequencies as required by the contract; (v) Checking and countersigning the monthly payment certificates after having established that the quality of the works is satisfactory and the quantities are correct; (vi) Inspecting all works to ensure conformity of the implemented works to the approved design requirements and solutions and compliance with the drawings and other documents comprising the contract and identifying any deviations from the original design; (vii) At no cost to the EA or IA, updating the original designs or proposing new solutions as necessary to reflect changed conditions on the field; (viii) Interpreting and applying the requirements of the contract and advising the IA on all matters relating to claims from the contractors, in particular with respect to claims for time extensions or extra payments and making recommendations thereon, including the possible recourses; (ix) Preparing detailed recommendations for contract variations for the review and approval by the IA; (x) Maintaining a day by day contract diary which shall record all events (including

29 environmental and social) pertaining to the administration of the contract, requests forms and orders given to the Contractors, and any other information which may at a later date be of assistance in resolving queries which may arise concerning execution of the works; (xi) Supervising the Contractor in all matters concerning safety and care of the works and workers (including the erection of temporary signs at road works) and, if required, to instruct the Contractor to provide any necessary lights, guards, fencing, and watchmen in accordance with the requirements of the Contracts; (xii) Reviewing, approving and monitoring the contractor's work program and the sources of materials; (xiii) Monitoring and reporting upon training and equipment provided by the contractor to the micro-enterprise maintenance groups; (xiv) Reviewing, approving and monitoring implementation of the contractors' environmental management plan, including ensuring the contractor complies with its reporting requirements and incorporating such reports in the consultants quarterly progress reports to the EA, WB and ADB; (xv) Explaining and/or recommending the IA to resolve (adjust) ambiguities, discrepancies or disputes arising from the contracts; (xvi) Inspecting and testing materials and works done by the contractor to ensure compliance with the contract specifications, and/or instructing the contractor to remove and substitute the improper materials and/or work as required to meet contract specifications; (xvii) Keeping a log book throughout the construction period where daily records over work quantities, tests and other activities to serve as a basis for monthly reporting and necessarily contain, as a minimum, information concerning: Work day start and end; Contractor's capability to execute works (availability of required equipment and labor force, technical condition, safety provision for works execution); Materials and structures brought to the construction site during the day (name, quantity, quality certificate or laboratory testing results); Works accomplished by the contractor during the day, i.e., name, place, volume, etc. (appropriate documents to be attached); Deviations from the design documents, appropriate measures undertaken; Emergencies, accidents, not planned suspension of works (indicating the reasons); Compiling monthly reports on the Contracts supervision and checking monthly billings; Controlling and appraising the progress of the works and recommending the Client to order Suspension of works and to authorize extensions of the period for completion of the works; Inspecting for approval all working drawings and as-built drawings prepared by the contractor; Assisting the Client with the execution of the Taking Over from the contractor of the Contract, in particular by preparing lists of deficiencies which need to be corrected; Measuring International Roughness Index (IRI) after the completion of each construction contract; Monitoring temporary employment generation through civil works; Monitoring travel time improvement to drive the length of the rehabilitated road sections over baseline conditions; Assisting the IA to carry out any other duties and responsibilities specified in the contracts. 23